The national-level stablecoin is here! Kyrgyzstan is issuing coins on the BNB chain, with CZ serving as an advisor to promote the CBDC.

Kyrgyzstan has launched a new stablecoin pegged 1:1 to the Kyrgyz Som, while also confirming plans for the issuance of a central bank digital currency (CBDC) and exploration of digital asset reserves. Former Binance CEO CZ stated that the KGST stablecoin will operate on the BNB blockchain, and once launched, BNB will be included in the encryption reserves.

KGST stablecoin on BNB chain's strategic significance

(Source: X)

The launch of the KGST stablecoin marks a historic step for Kyrgyzstan in the cryptocurrency field. This stablecoin, pegged to the Kyrgyz Som at a 1:1 ratio, will operate on the BNB chain, and this choice is not coincidental. The BNB chain is known for its high throughput, low transaction fees, and mature ecosystem, currently supporting thousands of decentralized applications and assets worth hundreds of billions of dollars. Choosing the BNB chain as the infrastructure means that Kyrgyzstan's stablecoin can access one of the largest blockchain ecosystems in the world from the very beginning.

CZ stated at the meeting that once the KGST stablecoin is launched, BNB will be included in Kyrgyzstan's encryption reserves. This is a milestone decision as it represents the first time a sovereign nation has included a single exchange token in its national reserves. While El Salvador and the Central African Republic have included Bitcoin in their reserves, including a token like BNB, which has a clear commercial entity background, is unprecedented in international financial history.

This arrangement brings a new value support for BNB. The inclusion of national-level reserves not only provides a stable source of demand for BNB but also grants it a certain status of “quasi-sovereign credit.” For Kyrgyzstan, holding BNB as a reserve asset can be quickly exchanged for liquidity when needed, and also allows participation in the growth dividends of the BNB on-chain ecosystem.

According to local media KG24, the Kyrgyz Cryptocurrency Commission must ensure that the KGST stablecoin is listed on international platforms and submit a proposal to create a national cryptocurrency reserve within two months. This timeline indicates the Kyrgyz government's urgency and determination to advance cryptocurrency plans. The two-month deadline means that the relevant legal framework, technical infrastructure, and international cooperation need to be completed in a very short time.

CZ became the strategic advisor of the Kyrgyzstan Cryptocurrency Committee during the first meeting around April. This appointment occurred after he resigned as CEO of Binance due to violations of anti-money laundering regulations, indicating that the Kyrgyz government values CZ's expertise in the blockchain field and global network rather than his regulatory controversies. On Wednesday, U.S. President Donald Trump pardoned CZ for his actions in violating anti-money laundering regulations while serving as CEO of Binance, clearing legal obstacles for him to participate more freely in international cryptocurrency projects.

Three-Phase CBDC Pilot Program

In addition to the KGST stablecoin, Kyrgyzstan is also simultaneously advancing its central bank digital currency (CBDC) program. President Japarov has suggested that the National Bank of the Kyrgyz Republic begin pilot testing for the digital som. This pilot will be conducted in three phases, based on a demonstration of the digital som platform built by Build Block TECH, used by the National Bank.

CBDC Three-Phase Pilot Program:

Phase One: Connect commercial banks to facilitate transfers, testing the efficiency and stability of interbank settlements.

Phase Two: Connect with the central financial department to conduct social and government payments, such as pensions, subsidies, and civil servant salaries.

Phase Three: Test offline and low-connectivity transactions to ensure that digital currency can be used in remote areas.

The National Bank of Kyrgyzstan stated: “After successfully piloting all three phases, the platform will be promoted and scaled up nationwide.” This phased approach is cautious and pragmatic, avoiding the systemic risks that a one-time nationwide rollout may bring. The offline transaction testing in the third phase is particularly important, as Kyrgyzstan, being a landlocked mountainous country, has many areas with inadequate network coverage.

The country's central bank initially stated in April that it would not decide whether to issue a CBDC until the end of 2026. However, with CZ's involvement and the president's push, this timeline is clearly accelerating. The shift from a cautious wait-and-see approach to active piloting indicates that the Kyrgyz government recognizes the risks of falling behind in the digital currency race.

According to data from cbdctracker.org, although more than 100 countries have launched CBDC projects, currently only three CBDCs are operational — the Bahamian Sand Dollar, Nigeria's eNaira, and Jamaica's JAM-DEX. If Kyrgyzstan successfully launches the digital Som, it will become the fourth country in the world to operate a CBDC and the first case in the Central Asia region.

The dual-track design of KGST stablecoin and digital som CBDC deserves in-depth analysis. The stablecoin primarily serves international payments and the encryption ecosystem, while the CBDC focuses on domestic retail payments and government functions. This division of labor allows Kyrgyzstan to embrace the global encryption economy while maintaining monetary sovereignty. The stablecoin can attract international investors and encryption enterprises, while the CBDC improves domestic financial inclusion and payment efficiency.

Binance Academy Integration and Talent Development Strategy

At the same time, Giaparov also suggested that the Ministry of Science, Higher Education, and Innovation submit recommendations on how to develop a digital finance knowledge program and train experts in the blockchain and artificial intelligence industries. Education is also a priority for Kyrgyzstan, which shows that the government understands that the success of technology adoption relies not only on infrastructure but also on talent reserves.

CZ stated that Kyrgyzstan will integrate Binance's education sector, Binance Academy, with its top 10 universities and fully localize the Binance application in South Asian countries. This educational collaboration will cultivate a generation of young talents familiar with blockchain technology in Kyrgyzstan, providing a human resources foundation for the country's digital transformation.

Binance Academy is one of the largest blockchain education platforms in the world, offering free multilingual courses covering everything from basic encryption knowledge to advanced DeFi and NFT technologies. Integrating this resource with Kyrgyzstan's higher education system means that students can directly learn cutting-edge blockchain knowledge in university courses and have the opportunity to participate in real projects.

The localization of the Binance application is equally important. Language barriers are one of the main reasons why people in many developing countries find it difficult to use encryption services. Comprehensive localization not only includes interface translation but also involves payment pipeline integration, customer service, and regulatory compliance. This localization will significantly lower the threshold for the people of Kyrgyzstan to use cryptocurrency.

Japarov also suggested that the Ministry of Economy and Commerce continue to develop a legislative framework for virtual assets. A clear regulatory framework is key to attracting international encryption companies. Kyrgyzstan's latest initiatives highlight how the adoption of cryptocurrency is advancing at the level of nation-states, achieving payment modernization, improving financial inclusion, increasing transparency, and attracting investment through the experimentation of stablecoins and central bank digital currencies.

For the global encryption industry, the case of Kyrgyzstan offers a compelling example: a landlocked Central Asian country with a population of only 7 million and a GDP of less than 15 billion USD is seeking economic transformation by boldly embracing blockchain technology. If this experiment succeeds, it could provide a replicable template for other countries of similar scale and development stage.